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    Financial Institutions Management Study Set 2
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    Exam 1: Why Are Financial Institutions Special
  5. Question
    Negative Externalities Exist in the Depository Sector When
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Negative Externalities Exist in the Depository Sector When

Question 3

Question 3

Multiple Choice

Negative externalities exist in the depository sector when:


A) the fear of DI insolvency leads to bank deposit runs
B) lending activity is impaired or constrained
C) there are delays in disbursements from insolvent DIs
D) All of the listed options are correct.

Correct Answer:

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